HIGHFILL -- Enplanements and revenue are at all-time high at the regional airport so directors broadly agreed Wednesday to go ahead with as many capital projects as they can over the next decade.
"We've essentially got direction now for 10 years worth of capital spending, potentially $200 million worth," said Aaron Burkes, CEO of the Northwest Arkansas Regional Airport Authority. "Everybody is in agreement that we need to go ahead and get designs going on everything so we're not losing any ground."
Board action
Northwest Arkansas Regional Airport’s board met Wednesday and approved:
• A $222,099 contract with Electrical Resources for new LED lighting on the airfield ramp. The system is expected to provide better light with lower use and maintenance costs. Light will be directed at the ground rather than the sky.
• A request from American Airlines to allow the carrier to remodel office, baggage and operational areas. The estimate for the work is about $1.5 million. The agreement will also add 766 square feet to the area American leases.
• Staff to negotiate with the concessionaire, Paradies, for more food and coffee options on the pre-security side of the airport terminal to find another willing vendor.
• Staff to look into creating an XNA Ambassador Academy outreach program. The program would take community leaders and give them a behind-the-scenes look at different aspects of the airport, the importance of the airport to the community and the challenges it faces.
• Staff to explore contracting with a service provider for an airport lounge tailored to business travelers.
Source: Staff report
Timing of the projects is mostly yet to be determined. A planning session is set for Nov. 7 and the board is expected to discuss landing fees and terminal rates for the airport in October.
"I think by the end of this year everybody will kind of know where we are in terms of what the priorities are, what we can pay for and when," Burkes said.
The list of projects includes renovation of a taxiway and expansion of the TSA checkpoint, both of which are underway at an estimated cost of about $33 million; an airport connector road, for which officials hope the state will do most of the work; a terminal renovation and expansion program, estimated at $63 million; a new concourse, estimated at $72 million; and, an air traffic control tower, estimated to cost $10 million. Those estimates are all in 2019 dollars.
"I'm kind of inclined to pay for everything and get going because you're going to have the place torn up for 10 years if you try to phase it in," said Stan Green, a board member. "At a minimum I'd say we need to do everything in this building and get started on four gates."
Finance officials said the time appears ripe to go ahead with all the projects the board can find a way to pay for. Some projects will qualify for 90 percent federal aid and state grants. Airport revenue can also be used or bonds can be issued.
Other wish list projects include buying land adjacent to the airport, a second parking deck and a hotel.
"This whole design effort is going to take nine to 12 months so we have a lot of time over the next two or three months, strategic planning and all that, to digest some of this other stuff," said Mike Johnson, another board member. "But, we can't waste any more time in getting design started on all of it. You're still talking five to seven years of design and construction to deliver all of this from where we are right now, whether we phase it or not."
Many critical capital improvement projects at the airport are tied to the number of enplanements, which are more than 788,000 so far this year and are projected to top 900,000 by this time next year. The projects need to be underway or completed by the time enplanements hit 1.3 million enplanements.
"It's the same old circle that we've been in before with you all," Ryk Dunkelberg, vice president of aviation planning and environmental consulting at Mead & Hunt, consultants who have worked with XNA for several years. "It's that your enplanements and your operations are exceeding any growth projection that we've ever done that the FAA approved and it appears that's just going to keep on going."
Enplanements are up 15.2% year-to-date as of July 31. Parking revenue is up $695,000 over 2018 and $595,000 over budget estimates. Parking deck occupancy was 80% in July and economy lot occupancy was 80%.
Landing fees are $218,000 over budget; fuel tax income $124,000 over budget; and interest income $24,000 more than budgeted.
Net operating income is at $6.3 million year-to-date which exceeds last year's $4.2 million and exceeds budget estimates of $4.7 million.
NW News on 08/22/2019